Intuit vs Xero Which Is More Profitable?

Intuit and Xero are two major players in the financial software industry, both offering products and services tailored to small businesses and individuals. Intuit, the maker of popular accounting software QuickBooks, has been a dominant force in the market for years. Xero, a newer entrant, is quickly gaining traction with its cloud-based accounting software. Investors looking to capitalize on the growing demand for digital financial solutions may find both Intuit and Xero stocks appealing options for their portfolios.

Intuit or Xero?

When comparing Intuit and Xero, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Intuit and Xero.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Intuit has a dividend yield of 0.58%, while Xero has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Intuit reports a 5-year dividend growth of 14.59% year and a payout ratio of 36.66%. On the other hand, Xero reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Intuit P/E ratio at 62.01 and Xero's P/E ratio at 171.95. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Intuit P/B ratio is 9.98 while Xero's P/B ratio is 23.43.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Intuit has seen a 5-year revenue growth of 1.19%, while Xero's is 2.34%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Intuit's ROE at 16.16% and Xero's ROE at 14.14%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $645.82 for Intuit and A$177.51 for Xero. Over the past year, Intuit's prices ranged from $557.29 to $714.78, with a yearly change of 28.26%. Xero's prices fluctuated between A$104.02 and A$181.07, with a yearly change of 74.07%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.